Dubai’s decision to let property owners in the Sheikh Zayed Road and Al Jaddaf areas convert their ownership status to freehold will have a major impact on the city real estate market, according to experts.
The new rules could see a surge of investments, new opportunities and price growth.
The Land Department announcement is a pivotal step for the city’s real estate sector, says Firas Al Msaddi, CEO of fäm Properties.
Freehold Dubai real estate
Al Msaddi said: “This bold new initiative is a win for all stakeholders – investors, developers, and Dubai’s real estate market as a whole. It will not only attract a larger pool of investors, but also enhance the long-term resilience and growth of the market.
“Both Al Jaddaf and Sheikh Zayed Road are now positioned as prime real estate hotspots. Granting freehold ownership to all nationalities in prestigious areas like these will boost market sentiment and investor confidence.”
Dubai Land Department (DLD) announced that 457 plots are eligible for conversion to freehold:
- 128 on Sheikh Zayed Road, from the Trade Centre roundabout to the Dubai Canal
- 329 plots in Al Jaddaf
Al Msaddi said the move shows the DLD’s commitment to creating new opportunities for investors and developers, and underlines the city’s status as a global leader in real estate innovation, with a thriving and inclusive investment environment.
He believes the implications for Al Jaddaf are profound, and said: “This strategic location, now with freehold status, will undoubtedly see a surge in commercial activities and a rise in property prices.
“Al Jaddaf uniquely fills a critical supply gap, offering residential and commercial plots that are rare in Dubai’s prime areas.
“For commercial plots, the medium sizes available are especially attractive to end-users -companies that aim to build their own headquarters or single-tenant buildings.
“This flexibility is scarce, as most commercial plots in Dubai are designated for high-rise developments. Al Jaddaf’s plot offerings are, therefore, highly appealing to both investors and businesses.”
However, Al Msaddi says that the relatively high fees for converting plots into freehold status must be taken into account, as sellers will likely test the market with higher asking prices.
He said: “If these prices surpass what is commercially feasible for development, transactions may slow. Over time, the market will self-regulate, and new price benchmarks will emerge based on what buyers are willing to pay.
“Dubai’s plot prices are already elevated, driven by strong demand from developers launching off-plan projects. Under current market conditions, plots are typically only viable for developers planning off-plan sales, as developing for leasing purposes often doesn’t make commercial sense at today’s prices.”
For Sheikh Zayed Road, Al Msaddi says the shift to freehold will boost the momentum already created by the launch of several new towers, injecting dynamism into the market and significantly increasing the liquidity of plots in this iconic area.
He said: “Previously, plots on Sheikh Zayed Road were primarily developed for lease, which limited their appeal and market flexibility. Now, with freehold ownership, these plots are open to a global audience, transforming this stretch into a highly competitive and attractive investment destination.
“The freehold announcement will unlock new opportunities for both developers and individual investors, ensuring the area operates on more dynamic and global fundamentals.”
W Capital agrees that the Land Department plan to allow owners to convert their ownerships to freehold has positive long-term effects and enhances the investment climate in these two areas.
Making them available to all nationalities and supports flexibility and sustainability within the real estate sector.
W Capital stated that this step benefits private property owners in the two areas, as it will maximise the market value of properties in Sheikh Zayed Road and Al Jaddaf for property owners wishing to convert their lands into freehold ownership, and will also enhance investment attractiveness in the two areas.
Walid Al Zarooni, W Capital CEO, said: “The new initiative will contribute to increasing the economic attractiveness of lands within the two designated areas, and contribute to launching modern real estate projects that suit the aspirations of freehold investors”.
He pointed out that property owners will benefit from the price change resulting from converting the area to freehold ownership. The move will also contribute to making real estate investments in Dubai attractive and flexible while attracting investments in the long term.
Al Zarooni said that the real estate market has reached a high level of maturity and leadership globally and regionally, and continues achieve record sales, thanks to many factors.
The first is effective regulatory measures that facilitate investment operations, second, the pursuit of achieving the ambitious goals of the Dubai Real Estate Strategy 2033, which is to increase the volume of real estate transactions by 70 per cent.
That will enhance the value of the Dubai real estate market to one trillion dirhams, in addition to doubling the value of real estate portfolios to reach AED20bn ($5.45bn).
The CEO expected demand for land in these areas to increase compared to other places, while new alliances may emerge to launch projects in areas converted to freehold ownership.
Property owners can verify their eligibility through the Dubai REST smart app. Eligible owners must submit an application to the DLD for land assessment and valuation.
Conversion will involve a fee of 30 percent of the property’s valuation based on Gross Floor Area.
After payment, owners will receive a map and freehold ownership title deed. Common area fees and service charges will align with guidelines set by the Real Estate Regulatory Authority.
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